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Senseonics: Medical Device Startup Awaits Further Approval
Stock Analysis & Ideas

Senseonics: Medical Device Startup Awaits Further Approval

I am neutral on Senseonics (SENS) because while Wall Street analysts are generally bullish on it and the average price target indicates strong upside potential over the next year, the business is highly speculative and is unlikely to become profitable anytime soon.

Senseonics is a medical device startup company that was founded in 1996. The company is currently headquartered in Maryland, and focuses primarily on developing innovative glucose monitoring products, which enable those with diabetes to live their lives fully and confidently.

The medical technology company operates in the designing, developing, and commercialization of all such products in the industry. Currently, the company is awaiting FDA approval on its latest invention, the implantable continuous glucose monitoring system.

Since the release of this news, Senseonics stocks have enjoyed an all-time high, especially within the last 12 months.

Strengths

Senseonics has created an extremely robust list of partners, including some companies it shares licensing interests with and others that it has created a long-term partnership with.

As of 2020, the company had 82 employees, and its reputation as an employer has put it amongst some of the top medical technology companies in the U.S.

The company has been able to raise almost $469.2 million of funding in total, and its market presence and brand identity have helped the company win over several big-name clients in the industry.

In addition to its rightful place in the market and a long-list of highly skilled employees, Senseonics also enjoys an excellent distribution network with several suppliers and distributors in the market.

Recent Results

According to the company’s release of the third quarter results from 2021, which ended in September, the company earned a total of $42.9 million in net income, which resulted in income of $0.10 per share.

In the third quarter of 2020, the company faced a loss of $23.4 million, which led to a loss of $0.10 per share. This massive increase in net income was linked with fair value adjustments and accounting for embedded derivatives.

As of September 2021, Senseonics has a total cash and cash equivalents and short and long-term investments of $201.1 million – compared to $109.1 million of outstanding debts.

Valuation Metrics

SENS stock is very difficult to value given that it has generated very inconsistent results throughout its history, and is currently not profitable and trading at a fairly high enterprise value-to-revenues ratio of 39.5x.

That said, analysts have pretty rosy projections for revenue growth in the coming years, including 126.3% expected growth in 2022.

Wall Street’s Take

According to Wall Street analysts, SENS earns a Moderate Buy analyst consensus based on two Buy ratings, one Hold rating, and zero Sell ratings in the past three months. Additionally, the average Senseonics price target of $5 puts the upside potential at 128.3%.

Summary and Conclusions

SENS stock has general Wall Street analyst support, and its average price target implies massive upside potential over the next year.

The company is also expected to grow rapidly in the coming years, which gives it a pretty bullish outlook.

That said, the company is not profitable and like won’t be for the foreseeable future. Additionally, as a medical device startup company, it is quite speculative.

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